30 January 2012

The U.S. Environmental Protection Agency (EPA) ruled on Friday that palm oil-based biofuels will not meet the renewable fuels standard due to carbon emissions associated with deforestation, reports The Hill

Oil palm plantations and rainforest in Malaysia

According to a notice published Friday in the Federal Register, palm oil-based biodiesel fails to meet a requirement that renewable fuels offer a 20 percent reduction in emissions relative to conventional gasoline:

Biodiesel and renewable diesel produced from palm oil have estimated lifecycle greenhouse gas (GHG) emission reductions of 17% and 11% respectively for these biofuels compared to the statutory baseline petroleum-based diesel fuel used in the RFS program. This analysis indicates that both palm oil-based biofuels would fail to qualify as meeting the minimum 20% GHG performance threshold for renewable fuel under the RFS program.

The decision means that palm oil-based biofuels can't be used to meet national renewable fuel standards. It therefore won't win favorable treatment relative to other fuel sources.

The EPA's ruling comes after extensive lifecycle analysis of palm oil production. While oil palm has the highest yield of any commercial oilseed its production is at times linked to conversion of tropical forests, which is a large source of greenhouse gas emissions. A number of studies have shown that deforestation significantly undercuts the climate benefits of palm oil as a biofuel source.

The EPA has opened a comment period on the decision. The palm oil industry is expected to weigh in on the findings.

The renewable fuels standard targets 7.5 billion gallons of 'renewable' fuels to be blended into gasoline by the end of 2012. The initiative aims to reduce dependence on foreign oil and cut emissions from transportation, but some analysts have questioned the effectiveness of the program, since the bulk of 'renewable' fuel is expected to come from corn ethanol, which environmentalists say has mixed climate benefits.